Asia Pac employees to get 6.3% wage hike next year

But you’ll never guess which two countries forecast the highest wage hike of 12%.

According to the latest Salary Trends Survey by ECA International, the Asia Pacific region as a whole will see an average wage rise of 6.3% next year, up from the 5.9% salary hike this year. The region’s highest increases continue to be in developing Asia where there is a need to keep pace with inflation and attract talents to meet their rapidly growing markets.

Companies in India and Vietnam on average are forecasting a 12% salary increase next year, followed by Indonesia (9.6%) and China (8.5%).

Japanese employees will see the lowest wage increase in the region and of the 60 markets polled.

Companies in Japan are predicting a 2.3% salary increase in 2012. However, on a positive note, Japan’s deflation will bump up the wage increase in real terms to 2.8% - higher than the regional real wage increase of 2.1%.

"Real salary increments in Japan have been consistently high," said Quane. "This has helped to maintain the high purchasing power of staff there relative to other Asian markets."

Conversely, in Vietnam, the impact of a 12% salary increase will be completely eroded by inflation, forecast to be 12.1% in 2012. Not surprising then, in real terms, wage increase in Vietnam is ranked at the bottom of the 14 Asian markets surveyed.

Mainland Chinese will enjoy real wage increases of 5.2% - the highest in the region.

“China’s position as the fastest growing major economy in the world coupled with difficulty finding employees with the right skills means that companies there have to pay higher salaries to those they are able to employ,” said Quane.

If inflation in the region falls from this year's 5.4% to 4.2% in 2012 as forecast, many employees in the region will be better off.